What is a time card?
A time card is a record used to track when an employee starts and ends their work shift. It helps calculate total hours worked, including breaks and overtime, ensuring accurate payroll and compliance with labor laws.
A Restaurant Owner's Guide to Time Cards
Overview
If you own or manage a restaurant, you already know how busy each day can get. Between taking care of customers, managing the kitchen, and keeping things running, it's easy to lose track of how many hours your team is working. That's where time cards come in - they help you keep an accurate record of when your employees start and end their shifts, so you can pay them the right amount.
Using time cards is one of the easiest ways to stay organized with payroll. If someone forgets to clock in or out, or if the records aren't clear, it can lead to mistakes - like paying someone too much or too little. Over time, these small errors can cost you money and even cause problems with staff.
This guide will walk you through how to use time cards from start to finish. You'll learn how to choose a system that fits your restaurant, how to track hours properly, and how to use that information to calculate pay.
Choosing the Right Time Card System
Before you can track hours and calculate pay, you need a time card system that fits how your restaurant works. The right system should be easy for your staff to use and help you avoid mistakes when it's time to run payroll.
There are a few common types of time card systems
1. Paper Time Cards - These are simple sheets or punch cards where employees write or stamp their hours. While they're low-cost, they can be hard to keep organized and are more likely to lead to errors. You'll also need to total the hours by hand, which takes extra time and can lead to mistakes.
2. Wall-Mounted Punch Clocks - These are traditional machines where employees insert a card to mark the time. They're more accurate than handwritten cards but still require manual calculations and storage.
3. Digital Time Clocks or POS Systems - Many restaurants use a point-of-sale (POS) system that includes time tracking. Employees clock in and out on the same screen they use to take orders. This is more efficient and usually links directly to payroll software.
4. Time Tracking Apps - These are cloud-based systems where employees clock in using a tablet, phone, or computer. Many apps offer real-time reports, overtime alerts, and automatic syncing with payroll. Some also have features like GPS tracking and facial recognition to prevent buddy punching.
When choosing a system, think about the size of your team, how often shifts change, and whether you want to connect time tracking directly to your payroll. Also consider local labor laws - some states require detailed records of breaks or split shifts.
Pick a system that reduces guesswork, saves time, and helps you feel confident about paying your team accurately. Once your system is in place, the next step is setting up a clear process for tracking time and managing schedules.
Setting Up Time Tracking
Once you've chosen a time card system, the next step is making sure everyone uses it the right way. Setting clear rules and expectations will help avoid confusion, missed punches, and payroll mistakes. It also shows your staff that time tracking is a priority and part of how your restaurant runs smoothly.
Start by creating a simple timekeeping policy. This should explain
- When employees are expected to clock in and out.
- What to do if they forget to punch in.
- How breaks and meal periods should be recorded.
- Who to talk to if they notice an error on their time card.
Post your policy in the break room and go over it during onboarding for new employees. This helps set a consistent standard from day one.
Next, make sure your schedule is posted in advance - ideally at least a week ahead. When everyone knows when they're supposed to work, they're more likely to clock in on time and stay within scheduled hours. Avoid last-minute changes unless necessary, as they often lead to timekeeping mistakes.
Assign a manager or supervisor to check time card activity each day. This doesn't need to take long - just a quick look to make sure there are no missed punches, early clock-ins, or long gaps. It's easier to fix small issues daily than to try sorting it out at the end of the pay period.
Also, remind staff to clock out for unpaid breaks, especially if you're in a state that requires documented meal periods. Not doing so could put your business at risk of non-compliance.
By setting expectations early and keeping the process simple, you'll save time later and make sure your team is paid correctly for the hours they work.
Collecting Hours Worked
Once your time tracking system and policies are in place, the next step is collecting hours worked. This means making sure all clock-ins and clock-outs are recorded correctly, reviewed regularly, and ready for payroll when the time comes.
Most restaurants operate on a weekly or bi-weekly pay schedule, so it's important to keep up with tracking on a daily basis. When employees clock in and out every day, their hours are recorded by your time card system - whether it's paper-based, part of your POS, or a mobile app. But simply having a system isn't enough. You or your managers need to check these records regularly to catch problems early.
Daily reviews are a smart habit. Managers should quickly scan the day's time cards to look for -
- Missed punches (for example, no clock-out time).
- Clock-ins that are too early or too late.
- Unexpected overtime hours.
- Long or missing break periods.
Weekly reviews should focus on checking the total hours worked for each employee. Look out for anything that seems off - sudden increases in hours, duplicate shifts, or someone consistently working beyond their scheduled time. This is also a chance to correct errors before they affect payroll.
Before the end of each pay period, finalize all hours worked. Confirm that any manual edits (like a missed punch that was added later) are accurate and approved. If you're using a digital system, you can usually export this data in a report that's ready for payroll. For paper systems, you'll need to add up hours manually, which takes more time and leaves more room for mistakes.
Consistently reviewing and collecting accurate hours helps you stay on top of labor costs, avoid payroll surprises, and pay your staff correctly.
Handling Hourly vs. Salaried Employees
Understanding the difference between hourly and salaried employees is key to using time cards properly and paying your team the right amount. While both types of employees may work side by side in a restaurant, the way you track and pay their time is not the same.
Let's start with hourly employees. These are usually your servers, cooks, dishwashers, and bussers. They get paid based on the number of hours they work, so time cards are essential. Every shift must be tracked carefully - from when they clock in to when they clock out, including any unpaid breaks. If they work more than 40 hours in a week (or more than 8 hours a day in some states), you may owe them overtime pay, usually at 1.5 times their regular rate. Missing a punch or recording an incorrect shift can directly affect how much they get paid.
Now, let's look at salaried employees. These are often managers or supervisors who receive a set amount of pay each week, regardless of the number of hours they work. While time cards aren't required for all salaried workers, it's still a good idea to track their hours - especially if they are non-exempt under labor laws. Some salaried staff are still entitled to overtime if they work over the legal limit. Tracking their time ensures you stay compliant and can help you monitor workloads and prevent burnout.
Be sure to know the exempt vs. non-exempt status of each salaried employee. Misclassifying staff can lead to serious legal issues and back pay. If you're unsure, check with a payroll advisor or labor law expert.
Calculating Total Pay Using Time Card Data
Calculating employee pay from time card data involves several important steps to ensure accuracy and compliance. Here's how to do it right
1. Calculate Regular Hours Pay
Multiply the total regular hours worked by the employee's hourly wage. For example, if an employee worked 40 hours at $15 per hour, their regular pay is 40 x $15 = $600.
2. Calculate Overtime Pay
If the employee worked more than 40 hours in a week (or according to your local rules), pay those extra hours at the overtime rate - usually 1.5 times their regular wage. For example, 5 overtime hours at $15/hour would be paid at $22.50/hour. So, (40 x $15) + (5 x $22.50) = $600 + $112.50 = $712.50 total.
3. Check Local Labor Laws
Overtime rules can vary by state or city. Some places require overtime after 8 hours in a day or have special rules for split shifts. Always follow the labor laws that apply to your location.
4. Account for Unpaid Breaks
Subtract any unpaid breaks, such as 30-minute lunch periods, from the total hours worked before calculating pay. Accurate break tracking helps avoid overpaying.
5. Calculate Salaried Employee Pay
For salaried workers, divide their annual salary by the number of pay periods. If they are eligible for overtime, track their hours and calculate additional pay accordingly.
6. Apply Rounding Rules Consistently
Many restaurants round clock-in and clock-out times to the nearest 5 or 10 minutes. Use a consistent method and make sure it complies with labor laws.
By following these steps, you can ensure your payroll is fair, accurate, and compliant.
Double-Checking and Submitting Payroll
Before sending off payroll to your accounting or payroll provider, it's important to double-check the time card data. Taking a little extra time here can prevent costly mistakes, upset employees, and potential compliance issues.
First, review all total hours worked for each employee. Check for anything unusual, such as very high or low hours, overlapping shifts, or missing punches. If you spot a missing clock-in or clock-out, follow up with the employee or manager right away to get it corrected. If your system allows, add notes or adjustments that are approved by management so payroll has a clear record.
Next, verify overtime calculations. Make sure overtime hours and rates follow your local labor laws and company policies. Overpaying overtime can unnecessarily increase labor costs, while underpaying can cause serious legal trouble.
Look closely at break times and deductions. Confirm that unpaid breaks were properly subtracted and that any paid breaks or special pay (like holiday or tip-outs) are accounted for. It's best to have consistent rules that everyone understands to avoid confusion.
If you're using digital tools, generate a payroll report that summarizes total hours, regular pay, overtime, and deductions. Use this as a checklist to catch any errors before submission. Paper-based systems require more manual review, so double-check your calculations carefully.
Once you're confident the time card data is accurate, submit the payroll on time. Late payments can hurt employee morale and may violate labor laws.
Finally, keep a record of the reviewed time cards and payroll reports. These documents are useful for audits, resolving disputes, and verifying compliance. Most states require you to keep payroll records for at least two to three years.
Labor Laws and Record-keeping
Keeping accurate time cards and payroll records is not just good business - it's also the law. Federal and state labor regulations require restaurants to maintain detailed records of hours worked, wages paid, and breaks taken. Staying compliant helps protect your restaurant from costly fines, wage disputes, and legal headaches.
Federal law, under the Fair Labor Standards Act (FLSA), sets minimum standards for record-keeping, including tracking total hours worked and overtime. Many states have their own additional rules that may require you to track meal breaks, rest periods, or daily overtime. It's important to familiarize yourself with the laws in your state and city to ensure your time card system supports these requirements.
You should keep all payroll and time card records for at least two to three years, depending on local regulations. Having organized and accessible records makes audits easier and helps resolve any questions about employee pay or hours worked.
Regularly auditing your time tracking data can spot inconsistencies or patterns that might signal problems - like frequent missed punches or unapproved overtime. Addressing these early keeps your team happy and your business compliant.
Ready to simplify time tracking and payroll for your restaurant? Visit Altametrics Workforce Scheduling, by clicking "Request a Demo" below, to learn how their platform can help you manage your team and payroll with ease.
To simplify managing time cards, scheduling, and labor compliance, consider using workforce management tools designed for restaurants. For example, Altametrics offers an all-in-one Workforce Scheduling platform that helps you track hours, manage shifts, and stay compliant with labor laws - all in one place. This can save you time, reduce errors, and give you confidence that payroll is accurate.
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Frequently Asked Questions
What types of time card systems are available?
Common options include paper time cards, punch clocks, POS-integrated systems, and digital time-tracking apps.
How can technology improve time card tracking?
Digital tools can automate time capture, reduce errors, simplify payroll, and integrate scheduling and labor cost controls.
What are the common mistakes restaurant owners make with time cards?
Common mistakes include missing punches, incorrect overtime calculations, not tracking breaks, and failing to review hours regularly.
What features should I look for in a digital time card system?
Look for ease of use, integration with payroll, real-time reporting, compliance features, and mobile access.
